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PLEASANTON, Calif. — Safeway Inc. has entered into a preliminary settlement of a shareholder lawsuit related to the pending buyout of the supermarket chain by New York-based private equity firm Cerberus Capital Management LP.
Safeway Inc. has entered into a preliminary settlement of a shareholder lawsuit related to the pending buyout of the supermarket chain by New York-based private equity firm Cerberus Capital Management LP.
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The class-action lawsuit, filed in May on behalf of Safeway shareholders, claimed that the merger announcement “omitted and/or misrepresented information [that] is believed to be material to Safeway shareholders’ ability to make an informed decision whether to approve the proposed transaction."
The lawsuit — filed against Safeway, its board of directors, Albertsons LLC, Saturn Acquisition Merger Sub Inc. and Cerberus — sought injunctive relief on behalf of Safeway shareholders as of March 6. That’s the date the $9.4 billion leveraged buyout was announced.
Cerberus said it would acquire Safeway and merge the companies’ grocery store assets, forming a chain of more than 2,400 stores operating under 16 banners, including Albertsons, Vons, Acme and Jewel-Osco.
Safeway said Monday that its memorandum of understanding with the shareholders includes provisions for the company to move ahead the planned expiration date of its shareholder rights plan by roughly three months to June 19.
“The settlement will be subject to the approval of the Delaware Chancery Court,” the company said in a prepared statement. “Safeway and the board of directors of Safeway believe the claims are entirely without merit, and in the event the settlement does not resolve them, intend to vigorously defend these actions.”
